captioning sponsored by wpbt >> this is n.b.r. >> tom: good evening, everyone. i'm tom hudson. home prices continue to climb, marking their best gains since the recession began five years ago. >> susie: i'm susie gharib. good evening. amazon shares surge to new heights after hours despite an earnings miss for the online retail giant. >> tom: and ford motor is firing on all cylinders. as strong u.s. sales help offset weakness in europe, we look at what's next for the u.s. auto maker. >> susie: that and more tonight on "n.b.r." >> tom: the u.s. housing market is building an even stronger foundation. so much so that home prices across the nation are rising at their fastest pace in more than six years. the latest data from s&p-case

schiller shows prices in 20 u.s. cities in november rose 5.5% from a year ago. was al theenth month ia row that prices have increased, the longest stretch of gains since before the financial market started to crumble. suzanne pratt takes a look at whether the housing recovery will continue. >> reporter: mortgage broker gary leib is taking a lot of calls these days even though the spring selling season is still a few months away. >> we are busy. i'm busy with both refinances and purchases, always helping people to save money or get into a home with a really good interest rate. >> reporter: the activity in lieb's office is a direct result of what's happening in the nation's housing market: people are buying and selling homes again. as a result, home prices are also moving higher. in 19 of the 20 major markets that s&p-case shiller tracks, prices in november were up from a year ago. only new york posted a modest

decline while phoenix, hard hit in the housing crisis, had a 23% gain. >> housing, overall, i think is getting better and better and should continue to improve throughout 2013. prices ha been up, housing starts are up, sales of new homes, sales of existing homes. all the key indicators have been gaining over the last six to nine months. >> reporter: blitzer predicts a year from now the u.s. will have a more normal housing market with home prices moving up faster than inflation. to be sure, challenges still remain, including ongoing foreclosures and the accessibility of mortgages. and there is also some concern about the recent rise in mortgage rates. the 30-year-fixed is currently 3.42%. that's up slightly from 3.31% in november, the lowest rate on record. >> if rates do edge up more than a quarter and sta getting back into the fours and fives, i think it's going to cause... have many negative effects on

the economy. >> reporter: however, if mortgage rates only move up slightly, that's likely to bring more buyers into the market. that's because many people have been waiting on the sidelines for a signal the housing market has bottomed. suzanne pratt, "n.b.r.," new york. >> tom: as home prices have risen, so have the stock prices of many home builders, with the stock prices more vulnerable than the housing market. the yellow line, the year-over-year changes in home prices. the blue line, the home builders' stomach exchange traded fund. they move higher before home prices do, and move lower before the prices crack. megan mcgrath is with us tonight. you've looked at this relationship between the actual price of homes and the home building stocks. what does the rally in home building stocks tell you today about home prices in the month ahead. >> it is certainly telling

us investors are expecting prices to continue to go up, and to go up quite a bit. prices as well as volume. there is a relationship there, too. we heard some good things about pricing today from daryl horton, prices up 9%, 6% on the square footage basis. we're seeing that, although we think maybe the stocks have gotten a little bit ahead of themselves and are anticipating price increases that aren't likely this year. >> tom: what has got to be encouraging, though, the home prices look to move up, as you mentioned, considerably higher, but those home prices are being absorbed. consumers out there are willing to pay that extra price. >> yes, they are, and one of the key factors in the recovery in 2012 and early 2013, has been a lack of inventory. there is just not a lot of homes for sale on the market. that is great for prices. what we think is important to look for as we move into the spring, as more homes start to come on to the market and put a little bit of pressure on the prices in the spring selling seasons. >> tom: and cerinly

you're concern with the new homes being completed. your best in class is k.b. homes, k.b.h., the stock at a 52-week high. what do you anticipate at k.b.h. in the year ahead. >> it is actually our only buy in the sector. and the reason we like it it is trading disowp discount to its peers. the company just pre-announced its orders for january, which are up 50% to the quarter to date. it seems as though the company is starting to turn things around. they issued more equity, so they should have a little more equity on their balance sheet. >> tom: k.b.h. homes is the only buy you have in your sheet. and ryelan group, the earnings are out, 55 cents a share, a much better than anticipated in this fourth quarter. orders were up, gross margins were up, and the

stock previewed all of this and looks to add tomorrow to another 3% closing after this price. what is not to love about ryelan? >> we're a little cautious going into tomorrow's conference call. that will be at noon tomorrow. the reason we're cautious is the beat from the announcement all came from outside of home littlestinlittlest -- home builg business. financial services did great, and they had some land sales, but they actually underperformed in their core business. we need to hear from the company, why, and what their outlook is for 2013. >> tom: do you have any position in k.b.h. homes or ryan? >> we do not. >> tom: megan mcgrath with us from mkm partners. >> susie: on wall street today, the dow is just points away from the 14,000 level and a new record high. and so is the s&p 500. investors were feeling upbeat even though a new report showed that a key consumer confidence index fell more than expected in january and to its lowest level in two years. economists say americans are

worried about higher payroll taxes and the outlook for jobs. but despite that, the dow rose 72 points, the nasdaq fell a fraction, the s&p added seven points. after the market close, investors also shrugged off a disappointing earnings report from amazon and bought up the stock. amazon shares surged as much as 9%. it earned 21 cents a share, six cents below analyst estimates. revenues rose 22% but were a billion less than estimates. amazon's c.e.o., jeff bezos, said the company's e-book business is paying off, growing by about 70% last year and is now a "multibillion-dollar category." but he didn't say how many kindle firetablets azon s sold. still, jason moser, an analyst with the motley fool, says: >> really, i think that amazon is going to prove to be the leader here in retail-- not just online retail-- because i think retail in general is heading

towards online retail for the most part, and amazon is really what is really setting the standard there. and that's why i think you see amazon performing so well today, and companies like walmart and target and best buy really back on their heels. >> susie: moser owns shares of amazon personally, and motley fool has a "buy" rating on the stock. now, amazon stock hit a fsh record, closing high on friday just shy of $284. we have more technical analysis on its stock chart on the web. just go to www.nbr.com, look for the "blogs" tab and click on michael kahn. >> tom: the federal reserve's open market committee began the first day of a two-day meeting. we speak with r.b.c. 's capital's chief economist. >> susie: presidet obama made the case today for a sweeping immigration reform, calling it a "boost" for the economy. by giving illegal immigrants a path to citizenship, the president said there would be less opportunity for some

employers to undercut companies that follow the rules. darren gersh reports. >> reporter: the president flew to las vegas today to make that case that immigration reform would help companies and workers who follow the law. with 11 million undocumented workers in the country, the president said some employers are tempted to pay less than minimum wage or cheat their workers out of overtime pay. >> if we are truly committed to strengthening our middle class and providing more ladders of opportunity those who a willing to work hard to make it into the middle class, we have to fix the system. we have to make sure that every business and every worker in america is playing by the same set of rules. we have to bring this shadow economy into the light. >> reporter: critics of the president's plan to give legal status to undocumented workers say they've heard that pitch before. they argue the 1986 amnesty law brought in more illegal workers who compete with americans looking for low-wage work. >> we can't just be thinking

about the needs of the illegal immigrant population, as attractive as many of them may be and as hard working many of them may be. we really need to be focusing on the americans who need those jobs and have been disadvantaged by the tremendous presence of illegal immigrant workers. >> reporter: the argument isn't just about low-wage work. the president says foreign students studying math and science at universities across the united states should get a green card when they graduate. >> right now, ere is a student wrestling with how to turn their big idea, their intel or instagram, into a big business. we're giving them all the skills they need to figure that out, but then we are going to turn around and tell them to start that business and create those jobs in china or india or mexico. that's not how you grow new industries in america. >> reporter: but for every opening at a top high-tech firm,

there are often dozens of applicants. the president's opponents say that's hardly a sign of a labor shortage. darren gersh, "n.b.r.," wasngton. >> susie: the federal reserve today kicked off its first meeting of the year and will announcits interest rate policy decision tomorrow. investors will be listening for any changes. the fed has said it will keep interest rates near zero until the unemployment rate dips below 6.5%. right now, that number is 7.8%, and inflation stays below 2.5%. and it is committed to spending

$85 billion a month in buying bonds to keep borrowing costs down. joining us now with a preview of what to expect: tom porcelli, chief u.s. economist at r.b.c. capital markets. >> susie: so, tom, what do you think? do you think that the fed is going to stick to this policy? we know there is a lot of debate within fed policy-makers. could we see any changes this year? >> well, you know, we don't expect any changes tomorrow. we expect it will be stat toe quo. over the course of the year, we expect that the $85 billion will remain roughly in place towards the end of the year. we could see some scaling back, but we don't think the federal stop, as suggested, would be the case and the minutes, just a couple of minutes after the last meeting. >> susie: do you think this strategy is working? the whole idea of getting the economy to grow by keeping costs down? we see that businesses and

individuals are having a tough time getting loans. we hear from c.e.o.s all the time they are not hiring. >> i think this is the critical point of this conversation. ultimately, one of the sad truths about the low interest rate backup is that few people are able to take advantage of it. look at the housing sector. you're dealing with historically low mortgage rates, but what you notice is one lending bank is fairly tight, and, two, there is not a lot of demand. what the fed is effectively engaged is trying to buy time. time between today when low rates actually don't matter that much, to some point in the future when low rates will actually gain some traction. but we're just not there yet. >> susie: that's the critical thing. you say some point in the future, the fed has indicated it will hold on to this policy until 2015, maybe longer, until it hits those targets. i don't know if you saw in the wall street journal

there was an op ed piece that said "policy is a drag on the economy." is this policy a risk to the economy? what do you think? >> i think the real risk from this policy comes from the exit strategy. the exit strategy is still years away, as i think most people recognize. but when the exit does come, the fed doesn't really have, i would say, aoverly robust tools to really deal with all of the additional reserves that have been pumped into the system. and that's when we think the real risk to the economy comes into play. but certainly in that article, and i think peter fisher was quoted in that article, there is a very sound point to a low-rate environment and banks effectively being unwilling to lend at these low rates. i think that is a fantastic point for the near term. more long-term, our real worry is about the exit. >> susie: real quickly, i want to ask you about the jobs report that comes out on friday because more people get jobs, it is

good for the economy. >> right. >> susie: might there be a surprise that more hiring is going on? >> we do not expect any surprises, at least not any upward surprises. it is interesting, almost over any time bucket over the last year, the average job gain has been about 150,000 mer month. 150,000 -- per month. where the aggregate demand hasn't picked up, companies are not picking up the hiring. we're looking for 150,000 a month, per average. >> susie: that's kind of look warm, but thank you, tom for coming on the show. we've been talking with tom porcelli, chief mist at rbc cap >> tom: despite a strong end to the year, ford stock fell more than 4.5% today. the concern is, ford doesn't think this year will be much better than last year. the auto maker earned 31 cents a share, up from a year ago and six cents better than forecasts.

revenues jumped 5.5% to $36.5 billion while global sales grew by 7%. much of that strength came from the north american market. but, as ruben ramirez reports, 2013 may bring with it some bumps in the road. >> reporter: 2013 may well turn out to be a year that ford gets stuck in neutral. while sales in north america are revving up, europe and the company's continuing investments in asia could pull it back to neutral. >> europe is just having all sorts of structural problems, and i don't see that turning around anytime soon. we've seen some wobbles in south america and in asia, but all around the globe everyone looks the u.s. as the real bright spot in terms of automotive sales. >> reporter: here in the u.s., ford says total auto sales could hit 16 million. that would be up more than a million units from 2012. >> we think that we will see stronger results in north america in 2013.

we think the margin will still come in at about 10%, which is a terrific margin nonetheless. it will be driven by higher volumes, industry, share and favorable pring. >> reporter: while u.s. consumers may be in a shopping mood, sales in europe have plunged. ford expects to lose $2 billion there this year, more than it had originally thought. >> we think that 2013 will be the trough, both in terms of our own loss and also industry volumes. and then, from '14 on, we expect the industry to recover pretty moderately, and our losses will start to reduce substantially on our way to a profit by mid- decade. >> reporter: as for asia, ford expects to break even there this year. back here at home, the u.s. market will likely continue to fire on all cylinders, but analysts say don't forget ford's also facing increased competition here at home from japanese and german car makers looking to stake their claim in detroit's backyard. ruben ramirez, "n.b.r.," new york.

>> susie: an about-face for j.c. penney and its stock. shares of the struggling retailer jumped more than 9% on word that it now plans to roll out more sales. just a year ago this month, c.e.o. ron johnson took the wraps off his turnaround plan for penneys, forgoing sales in favor of everyday value pricing. he also broke the department store model by setting up boutique-style stores within a store from brands like levi's and izod. well, many analysts and investors are now questioning

how long penney's board will stick by c.e.o. ron johnson. he was brought in after rolling out apple's successful store concept. >> i think it's too early to tell whether or not ron johnson is no longer going to be at j.c. penney. i believe that it is a positive move that they're going to bring back some of this couponing and sale activity. and, you know, j.c. penney hired ron johnson because of his legacy and because of some of the things he was able to do at apple, and i don't think they're going to give up on him just yet. i think time will tell. >> susie: tom, we'll find out more about how ron johnson's plan is doing when penney's reports fourth quarter results on february 27. so far, he still has the backing of bill ackman, the big hedge fund tycoon. he is a big investor in pennies, and he says he will give them three more years to prove themselves.

>> tom: the investors really like the news today. but they're down 24% since johnson came on board to j.c. penney. he still has a lot of ground to make up there. the broad market climbed to a new five-year high. growing home prices helped even though consumer confidence was down as the year began. after a choppy beginning, the s&p 500 turned higher in the first 45 minutes, hitting 1,500, and it didn't look back, finishing up 0.5%. trading volume picked up from yesterday-- 720 million shares on the big board, just over two billion traded on the nasdaq. thenergy sector powered the gains, up 1.6%, followed by the telecommunications and the health care sectors. independent oil refiner valero led the energy sector thanks to its latest quarterly earnings, hitting a seven-year high. valero is one of those refiners benefiting from the increase in u.s. oil production, allowing it to use cheaper north american petroleum instead of importing more expensive oil. shares shot up 12.8% as volume more than tripled.

the switch to lighter u.s. crude oil allowed valero to earn more than $12 per bael of oil it prcess, more thadouble a year ago. fellow refiner hess was up 9% to an 18-month high, continuing the rally sparked yesterday as the company announced plans to spin off its refining business to focus on exploration and production. an activist investor is pushing for even more spin-offs at hess. drug maker pfizer helped the health care sector move up today even as it continues to see sales hurt by generic drug competition. pfizer earned 47 cents per share. while down from a year ago, it was a better result than what was expected. generic versions of its cholesterol-lowering drug lipitor continued to pressure overall sales. but traders and investors were encouraged that pfizer's pipeline of new medicines will help expand sales in the quarters to come. shares gained 3.2% to close at a new 52-week high. the buying. though, comes ahead of pfizer's spin off of part of its animal health unit. that initial stock sale is

expected to come on friday. fellow drug company eli lilly rallied 3.2%, also at a new 52- week high. its results also were stronger than anticipated. lilly, though, increased its 2013 forecast while announcing it will buy back $1.5 billion of its own stock. but it was a cautious outlook for data storage giant e.m.c. that hit its shares today. the stock fell 4%. volume exploded to more than six times normal. it was the most actively traded issue on the new york stock exchange. in addition to a disappointing forecast, e.m.c. will lay off employees this year, but it did not say how many. cloud computing firm v.m. ware also will be cutting its payroll as it sees demand for its software slow. shares fell 21.5% to a new 52- week low. after falling to 11 month lows last week, apple shares have seen some buying interest rern with the company announcing a new product in understated style. the stock was up 1.9%. next week, it will unveil a 128 gigabyte ipad, doubling the

storage of its latest model, going after corporate customers. all five of the most actively traded exchange-traded products were up. the strongest gain was in the japan fund, up 1.3%. and that's tonight's "market focus." >> susie: a federal judge in new orleans today signed off on an agreement for b.p. to plead guilty to manslaughter charges and pay $4 billion in criminal penalties for the oil disaster in the gulf of mexico. b.p.'s "deep water horizon" rig exploded, killing 11 workers and eventually dumping more than 200 million gallons of oil into the

gulf of mexico back in 2010. the deal to settle with the feds was reached back in november. however, it does not resolve individual damage cases against b.p. >> tom: this weekend marks super bowl sunday, but the big event isn't just about fun and football. in tonight's "beyond the scoreboard," rick horrow says small businesses can learn a lot from the n.f.l.'s big game. >> in the 47 years since the first super bowl was held, the game has gone from a veritable january afterthought to a de facto national holiday. 110 million americans watch the game on television. $42,000 for a 30-second spot in super bowl i; now, the cost is over $4 million. and if the super bowl were a country, its g.d.p. would far exceed $3 billion. the n.f.l.'s marketing juggernaut has caused the increase in popularity, and small business owners can learn from how the n.f.l. manages its signature event. the key lesson: protect your brand. the n.f.l. spends millions of

dollars on trademarks to protect the super bowl name, and small business owners can learn where and when to deploy their own brand. because of those trademark restrictions, many companies resort to ambush marketing to get a super bowl benefit without paying for it. and small business owners can learn how to protect their own investment and use creative marketing techniques for their own benefit. i'm rick horrow. >> tom: for many teams, winning the super bowl happens on a wing and a prayer. this weekend, the ravens and t 49ers could be in trouble. there's a national shortage of chicken wings. while americans are expected to chow down on more than one billion wings this weekend, that's a lot less than last year. the reason: last summer's drought drove up feed prices, making it more expensive for chicken farmers to raise as many birds. that means that bucket of wings may cost you a little more on game day.

in the chicken wing market, what are we going to go for here, susie, nachos. >> susie: classic new york city pizza. who you rooting for, tom? >> >> tom: the 9ers. how about you? >> susie: no choice. i'm agnostic. >> tom: that is n.b.r. for tuesday night. thanks for joining us. you, too, susie. >> susie: good night, tom. thanks for watching, everyone. we'll see you online at www.nbr.com and back here tomorrow night. captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org